Trai lashes out at Telecom Commission; says it’s time to implement reforms


NEW DELHI: The telecom regulator has lashed out at the Telecom Commission (TC) for holding it responsible for the weakening health of the sector, instead saying it’s about time the government implements the watchdog’s numerous suggestions aimed at improving the sector.

In a three-page letter to the new telecom secretary, PK Pujari, who is now also the chairman of the commission, the regulator further said that TC had completely overlooked several factors that show the growth of the sector and had erroneously only picked on the falling government revenue as indicative of the sector’s health.

The Telecom Regulatory Authority of India (Trai), in its letter, also rejected TC’s accusations of not following its own directions on “promotional offers”, saying its decision that there was nothing wrong about the Reliance Jio Infocomm’s two consecutive free voice and data offers was based on the Attorney General of India’s legal opinion.

In February, the commission, under the then telecom secretary JS Deepak, had pulled up the regulator over the deteriorating health of the sector, citing a Rs 800-crore dip in the revenue of telcos in the October-December period and the resultant fall in licence fee and spectrum usage charge paid to the government. TC had also asked Trai to restrict promotional offers to the mandated 90 days — referring to Jio’s ongoing free offers, without naming the company — and said that stretching such offers was a key reason for the government’s revenue loss.

TC is the highest decision making body in the telecom department. Deepak has since been replaced by power secretary PK Pujari as the new telecom secretar, who also now heads the TC.

“The Authority completely disagrees with the commission that it has not implemented its directions on promotional offers either in letter or in spirit. The commission may note that while examining free promotional offers the authority had also sought a formal legal opinion from the Attorney General of India on the subject,” Trai said, adding that the matter was sub-judice and that it would abide by the decision.

The letter has contested the commission’s claims that the health of the sector was deteriorating because of falling government revenue and even said that revenue to the government cannot be the sole criteria for public policy.

“The telecom commission’s letter is premised on the contention that reduced tariffs is leading to reduced revenue for the government and poor financial health of the sector which may harm the interest of the sector and the financial institutions,” Trai said.

It added that this approach was inconsistent with the principles of public policy and canons of public economics. Instead the regulator has said that lower tariffs were in fact helping with penetration of mobile services in the rural areas where the tele-density was still a low 53.27% compared to the urban tele-density of 170%.
ET had reported in its edition on March 23 that the regulator has dismissed the commission’s claims that the sector’s health was deteriorating and had even contested the commission’s authority to comment on the subject.

“Affordable telecom services and consumer interest are some of the key elements of the NTP 2012, which surprisingly appear to have been overlooked and the maximization of the government revenue which is not one of the objectives of NTP has been given the centre stage by the commission,” Sudhir Gupta, secretary of the Trai, said in the letter.

The Telecom Commission in a letter on February 23 had categorically stated that he regulator needed to follow its own orders in letter and in spirit while evaluating the permissibility of promotional offers. It had also said that it was the regulator’s mandate to ensure orderly growth of the sector.

The commission’s letter reminding the regulator of its duties clearly hasn’t gone down well with the regulator, which has reminded the commission that the regulator is an independent body as per the Trai act.

“The rationale for clarifying the respective roles of the Trai and the central government in the Act is to protect the independence of the Trai as the regulator,” the letter has explained. Chiding the Commission the letter further adds that, ” thus the interaction between the central government in thus case, the telecom commission and the Trai should be as envisaged by the Act”.